After a short recovery in 2013, the polysilicon industry is once again steering toward oversupply, according to a new report from Germany-based Bernreuter Research.
According to preliminary estimates, the global output in 2013 decreased to approximately 228,000 metric tons (MT), down 4% from the 238,000 MT produced in 2012. The decline was mainly due to low utilization rates in the first quarter, the report says. In contrast, newly installed photovoltaic capacity increased at a double-digit rate to about 36 GW in 2013, significantly consuming the large polysilicon inventories resulting from oversupply in 2011 and 2012.
‘Although shutting down capacities of approximately 135,000 metric tons since 2011 has solved the oversupply problem in the short term, new entrants and recommissioned Chinese plants will again tip the supply-demand balance in 2015 at the latest,’ says Johannes Bernreuter, head of Bernreuter Research and author of the new report.
As a result, polysilicon price on the spot market will fall from $18/kg at the end of 2013 to $16/kg by the end of this year, Bernreuter forecasts. However, strong growth in the PV industry, which makes up approximately 90% of the total demand for polysilicon, will initially drive up the spot price.
Bernreuter Research projects PV installation forecasts with three scenarios – 43 GW (low case), 46 GW (base case) and 49 GW (high case). In the high-case scenario, the price of polysilicon would rise to as much as $21-$24/kg in the first half of the year. In all three scenarios, however, the report says the spot price will drop to $16/kg by year's end.
According to the report, up to 66,000 MT of low-cost capacity is soon coming online that will push expensive producers out of the market and will consequently reduce the spot price. Roughly one-third of the new capacity will be based on fluidized bed reactor technology using monosilane as feed gas, Bernreuter Research says. While maintaining high silicon purity, this technology entails manufacturing costs that are substantially lower compared to the established process. Therefore, the report concludes, a sustainable price upswing is not in sight.
‘At least over the next three years, spot prices of $25 or even $30 per kilogram, which some industry players dream of, will remain a Fata Morgana," Bernreuter says.
For more information on the report, click here.